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Tim Miller

Why Are House Prices Not Crashing Again?

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With a raft of bad news including today's Sunday Telegraph revealing that gross mortgage lending by the high street banks totalled just £50.25bn in the six months to June, down from more than £90bn in the same period a year earlier, why are prices not crashing again. The banks are demanding higher deposits as well. Now I firmly believe they will drop further, I still think 15% to 20% a good percentage, but I can not understand why after the spring bounce which died a death it is not kicking off. I know there is a shortage of houses coming on to the market, but even then, the economy is in a very bad shape. Is it the benefits system? Is it we as a country normally have two earners in a household? What is it? Why is it?

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Is it the benefits system? Is it we as a country normally have two earners in a household? What is it? Why is it?

Well yes that's exactly what it is, either the people loosing their jobs will have to sell their homes in 2 years or they will find jobs, there will not be a wave of repossessions due to the benefits system.

And most couples both work, whether they have children or not, that it's going to change any time soon and if one person looses their job cut backs are made, not houses lost.

This is a good thing for most people.

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Is it the benefits system? Is it we as a country normally have two earners in a household? What is it? Why is it?

Well yes that's exactly what it is, either the people loosing their jobs will have to sell their homes in 2 years or they will find jobs, there will not be a wave of repossessions due to the benefits system.

And most couples both work, whether they have children or not, that it's going to change any time soon and if one person looses their job cut backs are made, not houses lost.

This is a good thing for most people.

you sure about that?

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Is it the benefits system? Is it we as a country normally have two earners in a household? What is it? Why is it?

Well yes that's exactly what it is, either the people loosing their jobs will have to sell their homes in 2 years or they will find jobs, there will not be a wave of repossessions due to the benefits system.

And most couples both work, whether they have children or not, that it's going to change any time soon and if one person looses their job cut backs are made, not houses lost.

This is a good thing for most people.

I do agree it's a very good thing for people to not lose their homes, I am 100% with you on that. Paradoxically we then see any FTB's and others paying far too much for a home! I guess I feel houses are over priced by a long way, there must be losers, the problem being just who? Two wrongs don't make a right do they, I feel we should want cheaper properties and therefore all those who paid too much will lose out, if they are repossessed. It was all so avoidable as well.

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I do agree it's a very good thing for people to not lose their homes, I am 100% with you on that. Paradoxically we then see any FTB's and others paying far too much for a home! I guess I feel houses are over priced by a long way, there must be losers, the problem being just who? Two wrongs don't make a right do they, I feel we should want cheaper properties and therefore all those who paid too much will lose out, if they are repossessed. It was all so avoidable as well.

The whole system is utterly corrupt and rotten but forcing thousands of people out of their homes isn't the answer, there needs to be a way to fight back, to opt out of the game and the only one I can see is paying off the debts as fast as possible.

For some people if the house prices were 1/3 of todays prices they would still never own outright because of their mentality.

Right to buy is a perfect example of that, how many got a 40% discount and still screwed up, a fair few I bet.

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I do agree it's a very good thing for people to not lose their homes, I am 100% with you on that. Paradoxically we then see any FTB's and others paying far too much for a home! I guess I feel houses are over priced by a long way, there must be losers, the problem being just who? Two wrongs don't make a right do they, I feel we should want cheaper properties and therefore all those who paid too much will lose out, if they are repossessed. It was all so avoidable as well.

I'm sorry I have to disagree, I feel people should lose their homes, why can't I have a mega home, fall into difficulties and then keep my home at the taxpayers expense.

I keep my overheads low to avoid this happening to me, no one made them take out a mega mortgage. This site is has posters having a hard time in rented property when they would much rather buy but don't want to mortgage themselves to death.

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The whole system is utterly corrupt and rotten but forcing thousands of people out of their homes isn't the answer, there needs to be a way to fight back, to opt out of the game and the only one I can see is paying off the debts as fast as possible.

For some people if the house prices were 1/3 of todays prices they would still never own outright because of their mentality.

Right to buy is a perfect example of that, how many got a 40% discount and still screwed up, a fair few I bet.

So going back to my original question, is it the benefits system and two earners in a home stopping further falls? Or is it more than that? I think it must be more. There are so many negative factors which should see further falls, my God, earnings to average house prices is one example, houses are still today higher than at the height of the last boom! It does not make sense they are still so high. The UK is the second most in debt per capita in the world after Ireland. The USA is a mere 16th place and look at there house market.

I was thinking of buying on the south coast, but quite frankly, prices are still far too expensive, I'm now looking at the Canary Islands. A honest agent there tells me the market is stone dead!

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I'm sorry I have to disagree, I feel people should lose their homes, why can't I have a mega home, fall into difficulties and then keep my home at the taxpayers expense.

I keep my overheads low to avoid this happening to me, no one made them take out a mega mortgage. This site is has posters having a hard time in rented property when they would much rather buy but don't want to mortgage themselves to death.

Mega home for £200k ? Lol - That's the upper limit that the interest part of the loan the benefits cover

You're looking at a 3 bed semi in an awful lot of places. And you could do that too, anyone could/can, what's stopping you ?

If you seriously think it would be cheaper to accommodate people who've had their houses repossessed you're wrong and it would fall to the tax payer one way or another so lets take the most sensible, cheapest option eh ?

Nobody wants to mortgage themselves to death but given the choice between some rental experiences it would be preferable IMO.

Direct your anger at tax payer picking up the tab to the banks not some poor sod that bought a house and then lost his/her job.

Edited by iLegallyBlonde

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I'm sorry I have to disagree, I feel people should lose their homes, why can't I have a mega home, fall into difficulties and then keep my home at the taxpayers expense.

I keep my overheads low to avoid this happening to me, no one made them take out a mega mortgage. This site is has posters having a hard time in rented property when they would much rather buy but don't want to mortgage themselves to death.

Your assuming all those being repossessed bought a mega home, with a mega mortgage, I doubt this is the case at all. Just look at what properties are in auction that were repossessed. I think any FTB has to have a mega mortgage for a small 1 bed flat anyway. Did they lie to get the mortgage, well yes, I bet some did. Is it the public's fault this was a necessity to buy, I don't think so, prices and the market should have been controlled in the first place.

You have also ignored a change of circumstances happening to people, unemployment, pregnancy, bankruptcy, separation, divorce, death of a partner, illness or just a down turn in business! All change ones ability to pay ones bills.

Edited by Tim Miller

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you overstretch?

why?

because you were certain you were going to make a killing.

Why else?

you lost.

time to cash in and move to rented and let the prudent have a go.

losing your home is not like going to prison or anything. its nasty, but so is a 25 year IO mortgage you cant afford anymore...months of pressure and worry. Losing it would be a relief for many.

and its POSSESSED...an order for POSSESSION...FFS

Edited by Bloo Loo

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With a raft of bad news including today's Sunday Telegraph revealing that gross mortgage lending by the high street banks totalled just £50.25bn in the six months to June, down from more than £90bn in the same period a year earlier, why are prices not crashing again. The banks are demanding higher deposits as well. Now I firmly believe they will drop further, I still think 15% to 20% a good percentage, but I can not understand why after the spring bounce which died a death it is not kicking off. I know there is a shortage of houses coming on to the market, but even then, the economy is in a very bad shape. Is it the benefits system? Is it we as a country normally have two earners in a household? What is it? Why is it?

Come on, why has the crash stalled?

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you overstretch?

why?

because you were certain you were going to make a killing.

Why else?

you lost.

time to cash in and move to rented and let the prudent have a go.

losing your home is not like going to prison or anything. its nasty, but so is a 25 year IO mortgage you cant afford anymore...months of pressure and worry. Losing it would be a relief for many.

and its POSSESSED...an order for POSSESSION...FFS

Well it's not answering why the crash has stalled, however not everyone who bought a home did it to make a killing. I suspect many bought for fear if the did not they never would be able to 'get on the ladder'. Now that's the governments fault for allowing this to happen.

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Even if prices drop 20/30% nobody can buy anyway so what's the point ?

We're seeing advertised properties come on increasing by 5 - 10% on 2008 prices but nobodies buying because it's a stalemate and then every now and then somebody does buy at a decent discount but that is never advertised and people generally don't look at www.ourproperty.co.uk etc etc and all they see is the sold sign. So the EA implies that it sold for asking and so the cycle continues.

I've got about 50% equity in my house now and would happily sell for 25% below 2007 if the next person up the chain would do the same, but they won't so it's a mexican standoff for now.

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Come on, why has the crash stalled?

But has it?

I was reading a post on the expats site a few days ago where someone was saying the value of their house had halved in the last couple of years and they might not be able to afford to emigrate anymore. Sounds like a crash to me.

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But has it?

I was reading a post on the expats site a few days ago where someone was saying the value of their house had halved in the last couple of years and they might not be able to afford to emigrate anymore. Sounds like a crash to me.

But that's the point they won't sell it will they, they would rather not emigrate.

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Well it's not answering why the crash has stalled, however not everyone who bought a home did it to make a killing. I suspect many bought for fear if the did not they never would be able to 'get on the ladder'. Now that's the governments fault for allowing this to happen.

I disagree that it has stalled.

Fear is a big factor....the fear of missing out is from the same logic as the urge to make a killing....two sides of the same coin.

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Are we still on target for y-o-y crash at cruise speed? -1% per month?

I haven't followed this obsessively, perhaps we dropped too fast at the start of the year.

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Come on, why has the crash stalled?

Because the whole market has stalled. It is very difficult to measure prices when no sales are actually taking place. And in any case, the property market moves much more slowly than for example the stock market anyway. In the stock market, indices are calculated every minute, and it takes at most about 5 minutes to buy or sell something. The the property market, indices are calculated either monthly or quarterly, and it takes at best months to buy or sell, and possibly years.

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But has it?

I was reading a post on the expats site a few days ago where someone was saying the value of their house had halved in the last couple of years and they might not be able to afford to emigrate anymore. Sounds like a crash to me.

Where was there house?

I am going on the Halifax / Nationwide figures that prices went up a tiny % for a few months, I just do not understand why. I did see the spring bounce, lots of houses I had been looking at went under offer, but you would have thought by now it would be back to a full crash, your saying you think it is? I do not see it like that.......................yet.

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Where was there house?

I am going on the Halifax / Nationwide figures that prices went up a tiny % for a few months, I just do not understand why. I did see the spring bounce, lots of houses I had been looking at went under offer, but you would have thought by now it would be back to a full crash, your saying you think it is? I do not see it like that.......................yet.

these indexes are based on approvals...not completions.

press reports that completions fail to happen on poor valuations in a lot of cases. it only takes one failure to break a chain....could be 2 houses, could be 50 in a chain.

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these indexes are based on approvals...not completions.

press reports that completions fail to happen on poor valuations in a lot of cases. it only takes one failure to break a chain....could be 2 houses, could be 50 in a chain.

Yes you are right, I do know this. I guess I am just frustrated at the market. I am torn, I live abroad, I was tempted to come back, most of all I would hate the weather though. I also am looking at the cost of properties elsewhere and think the UK is still a rip off! You know even if it drops another 20% it's still very poor value compared to elsewhere.

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Yes you are right, I do know this. I guess I am just frustrated at the market. I am torn, I live abroad, I was tempted to come back, most of all I would hate the weather though. I also am looking at the cost of properties elsewhere and think the UK is still a rip off! You know even if it drops another 20% it's still very poor value compared to elsewhere.

Sorry yo are disappointed. weather is here, wish you were luvly.

course, houses being 20% over the top is the reason the economy is about to take another drop...we have to compete with the World these days, and if our living cost is 20% over ( much more than that IMHO) then we are uncompetitive from the moment the factory doors are open.

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